Choosing a Debt Payoff Method

Learn about the payoff methods in the Snowball Debt Spreadsheet template

Written by Heather Phillips Updated over a week ago

The Tiller Debt Snowball Spreadsheet allows you to customize your debt payoff plan. The Progress sheet in this template offers three methods for paying off your debt. This section is meant to give you a quick overview on each of the three, how each one works, and the pros and cons, but ultimately the choice is yours and should be based on your unique financial situation. Each of these methods works by allocating extra money (beyond the minimum payment) toward a debt. Which debt gets the extra money is based on the chosen payoff method.

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Smallest Balance First (Snowball) - Recommended

Choosing this method allows you to quickly see progress with your debt payoff. It works by allocating the extra money to the debt with the smallest starting balance. After this debt is paid off, the next smallest starting balance debt gets the leftovers and so on and so forth. It’s highly motivating and more people see more success with this method than any other. The downside is that you will end up paying a little more in interest over the entire period of your debt payoff plan.

Avalanche (Highest Interest First)

Choosing this method allows you to save money you would pay toward interest over the long run as you’re paying off debt. It works by allocating the extra money to the debt with the highest interest rate. The downside is that it may take longer to pay off your first loan with this method and appears to delay progress.

Lowest Ranked First

Choosing this method allows you to fully customize your debt payoff plan. It works by allocating the extra money to the debt that has the lowest rank number in the Rank column of the Accounts to Track table. It’s great because it allows you to make progress on paying off the debt that’s most important (or most annoying) to you, but the downside is that it may take a while to see real progress, and it could cost you more in interest over the lifetime of the debt payoff period.